OsCorp scientist Richard Parker records a video message to explain his disappearance. Later, he and his wife, Mary, are aboard a private jet hijacked by a man sent to assassinate Richard. The plane crashes, killing both Richard and Mary, after he uploads the video.

In the present, Richard's son Peter continues to fight crime as Spider-Man. He pursues and apprehends Aleksei Sytsevich, who attempted to steal a truck containing plutonium. During the chase, Spider-Man rescues OsCorp Industries employee Max Dillon. Later, Peter meets with Gwen at their high school graduation ceremony, and insists he keep his vow to her father and ends their relationship. Peter's childhood friend Harry Osborn returns to Manhattan to see his terminally-ill father Norman, CEO of OsCorp. Norman explains his illness is genetic, and Harry is at the age where it first develops. Norman gives Harry a small device he claims contains his life's work. The next day, Norman dies and Harry is appointed the new OsCorp CEO. He humiliates the OsCorp board, which has been privy to Norman's secret biogenetic projects for foreign military powers.

Thinking that they have become friends, Dillon idolizes Spider-Man. While tending to some maintenance in an OsCorp laboratory, he shocks himself by accident, and the line breaks off and he falls into a tank of genetically-engineered electric eels. They attack him, and he mutates into a living electric generator. Meanwhile, Peter attempts to maintain a friendship with Gwen, but she reveals she may move to England for school. Before they can discuss it, Dillon wanders into Times Square and accidentally causes a blackout. Spider-Man attempts to calm him down, but the police fire at Dillon, making him think that Spider-Man had betrayed him before attacking furiously. Spider-Man stops him, and Dillon is taken to Ravencroft Institute, where he is studied by German scientist Dr. Kafka. The first symptoms of Harry's illness show, and he uses the device Norman gave him to deduce that Spider-Man's blood could help save him. He asks Peter, who has been selling photos of Spider-Man to the Daily Bugle, for help finding Spider-Man. Peter refuses, unsure of what effects the transfusion would have, and although he does come to Harry as Spider-Man, he still refuses, and Harry develops an intense hatred towards Spider-Man. The OsCorp board-members, in particular, the vice-president of Oscorp, Donald Menken, frame Harry for covering up Dillon's accident, and remove him as CEO. Harry's assistant, Felicia Hardy ( who by now is the only Oscorp board member who's still loyal to him), informs him of equipment that could help him, so he makes a deal with Dillon, who now calls himself "Electro", to get him back inside the OsCorp building. There he finds a suit of armour and other equipment made by Norman, as well as venom from the now-destroyed genetically-altered spiders. The venom accelerates Harry's illness and transforms him into a goblin-like creature, but the suit's built-in emergency protocol restores his health and cures his disease.

Peter uses information left by his father to locate the video message in an abandoned subway station's hidden lab. Richard explains he had to leave because he refused to cooperate with Norman's biogenetic weaponization plans. Peter then hears a voicemail from Gwen, telling him she was offered the British scholarship and is heading to the airport earlier than expected. He manages to catch her and professes his love for her, and vowing to go wherever she goes, they agree to go to England together. Electro causes another blackout, and Peter heads off to fight him. Gwen follows, and together they restore power and overload Electro's body, killing him. Afterward, the transformed Harry, who now calls himself "Green Goblin", arrives equipped with Norman's armor and weaponry; upon seeing Gwen, Green Goblin deduces Spider-Man's secret identity and, swearing revenge for being refused the blood transfusion, kidnaps her. He fights Spider-Man at the top of a clock tower, but is knocked unconscious and defeated. Despite Spider-Man's attempts to save Gwen, she falls to her death after webbing breaks in the clock tower. Distraught, Peter ends his career as Spider-Man.

Five months later, Harry is coping with the after-effects of his transformation while incarcerated at Ravencroft. His associate, Gustav Fiers, visits Harry and the pair discuss forming their own team. Harry orders Fiers to start with Sytsevich and Fiers breaks Sytsevich out of prison. Equipped with an electromechanical suit armor, Sytsevich calls himself "The Rhino" and rampages through the streets. Peter, inspired by Gwen's graduation speech, confronts him as Spider-Man.